Wednesday, October 26, 2016

The Kmartization of the Watch Industry

It is, to me at least, a simple question -

If you, the watch brand, list the MSRP of a watch at $1,250, you create an idea that maybe, just maybe $1,250 is a fair price to pay for it.  When you, the brand (or possibly a disgruntled or simply inept) distributor then place your watch on Mass Drop or Touch of Modern at a deeply discounted price, say $449, it is likely that you will achieve 3 things:

1.  You will sell more watches in one fell-swoop
2.  Perhaps more people will be aware of your watches than were before
3.  You guarantee anger and frustration from previous customers and retail partners while also not-so-subtly setting an expectation among the general public that the watch should be priced at the $449 level as opposed to even $1,000

Now I want to be 100% transparent about a few things - I do work with brands and represent a handful of them.  I have delved into the idea of partnering with a discount group buy concept to introduce a new brand.  And in fairness, it does get the word out quickly, but it also sets an unrealistic expectation about pricing - which will become a realistic expectation in the eyes of the customer.  The REAL price of the watch will continue to reflect the percentage that you discounted the watch in partnership with the group buy site. 

Further - I do not see anything wrong with what Mass Drop and Touch of Modern are doing.  The grey market has proven that there is too much supply and not nearly enough demand at a certain price point.  So to a large extent I think it is a case of "physician heal thyself".

But as the guy you ask to help "spread the good word" about your watches, let me share some honest feedback - while you might move some watches quickly, make some money quickly, and get your watch in front of several thousands of extra people, you have also directly informed the market place that your watches were over-priced (even if they weren't).  And most importantly, you have succeeded in losing the trust of your previous customers and retail partners. And as we all know, trust is one of the most fragile things out there.  It takes years to gain, and seconds to lose.


  1. Sounds like brand suicide to me. you may get the word out quickly and widely, but to the wrong audience...furthermore you can never climb back up the price hill which in luxury strategy is a non sequitur.

    1. Just today I received an email from a company on Kickstarter asking us to post a review about their brand and to advertise it to our readers. I do not mind doing it for free as that is what a forum is for but I also do not want to see these type of watches on television channels with over inflated MSRPs and 6 value pays.

      We have a section for Mass Drop (deals) and we all know they are either overstock or slow movers. But if someone can purchase a watch for much less then the MSRP I am good with it. Most buyers of watches know that MSRP is bull. A google search will find deals all day. If companies continue to push the fake MSRP on buyers, the market will shrink even more.